India Telecommunication Industry Report - 2015
The telecommunication industry has played an important role in the development of the country’s economy over the last few years. Not only has it increased connectivity across the country, it has also helped in stimulating other sectors of the economy. The telecommunication sector in India comprises several segments, namely wireless services, wire line services, internet and broadband services and mobile valued added services.
India’s telecom sector continued on the path of revival in FY15, buoyed by a good year in FY14. Major wireless providers saw an improvement in their market share both in terms of subscriber base and revenue, while fringe players continued to bleed. Mobile cellular market consolidated further during FY15. Big three players accounted for around 60% of the subscriber base at the end of FY15.
The reduction of 2G base spectrum prices in February 2014 auction brought some relief to the government, which earned INR 612bn (~USD10bn) from this auction that ended after 68 rounds of bidding over 10 days. The latest round of spectrum auction in March 2015 saw aggressive bidding across all bands (2,100MHz; 1,800MHz; 900MHz; and 800MHz). As of March 2015, over 86% of the spectrum was provisionally allocated to bidders with the government fetching INR 1.02tn in revenue.
Wireless penetration rate saw strong growth in FY15. It is the rural parts which are driving new subscriptions in India. Wireline segment contracted while data and internet usage continued to grow during the year. Low penetration rates in rural India coupled with high growth in the internet and broadband segment will drive the sector over the next few years.
According to the Telecom Regulatory Authority of India, the sector contribution to India’s GDP was around INR 2.5tn in FY15. The sector recorded a growth of 21% y/y in FY15 in terms of gross revenues.
Wireline subscriptions saw a contraction of 6.7 y/y % in Q4FY15. The contraction was acute in rural markets while urban markets recorded a gradual decline.
India’s current regulations and policies encourage foreign companies to own and start operations in the telecom sector. Actual inflow of FDI in the sector was USD 17.1bn from April 2000 to March 2015.
During 2006-11, wireless subscriptions grew at a CAGR of 38%. The growth plateaued post 2011 and even went into the negative territory in FY13-14. In FYE15, the total subscriber base grew by 7% y/y.
1. Industry Profile
1.1 Sector overview
1.2 Sector size
1.3 Competitive landscape
1.4 Environmental scanning
2. Market Trends and Outlook
2.1 Key economic indicators-India
2.2 Mobile cellular segment
2.2.1 Subscriber base
2.2.2 Minutes of usage (MoU)
2.2.3 Average revenue per user (ARPU)
2.3 Wireline segment
2.4 Internet and broadband segment
2.5 Market outlook
3. Leading Players and Comparative Matrix
3.1 Leading Players
3.1.1 Bharti Airtel Limited (Bharti Airtel)
3.1.2 Idea Cellular Limited (Idea)
3.1.3 Reliance Communications Limited (Reliance Comm.)
3.2 Comparative matrix
3.3 SWOT analysis
4. Tables and Charts
Table 1: Current status of different telecommunication services segments in India
Table 2: World mobile cellular subscription statistics
Table 3: Key financial ratios of the leading players FYE Mar-15
Table 4: Key financial results of the leading players QE Jun-15
Chart 1: Overall mobile teledensity-India
Chart 2: Gross revenues from Indian telecom sector
Chart 3: Composition of gross revenue
Chart 4: Cumulative FDI in telecom sector-end of period
Chart 5: Current account deficit and fiscal deficit
Chart 6: Quarterly GDP growth rate
Chart 7: Average monthly USD to INR exchange Rate
Chart 8: Inflation during FY14
Chart 9: Repo rate
Chart 10: Number of mobile cellular subscribers in India
Chart 11: Comparison of rural and urban penetration rates
Chart 12: Market share of access service providers by subscriber base
Chart 13: Telecom service areas by subscriber share
Chart 14: Q/Q growth in subscriber base of major service areas
Chart 15: Net additions in subscriber base of major GSM players in Q3FY14
Chart 16: Net additions in subscriber base of major CDMA players in Q3FY14
Chart 17: Minutes of usage per subscriber per month
Chart 18: Blended average revenue per user per month
Chart 19: Revenue breakup of GSM players
Chart 20: Revenue breakup of CDMA players
Chart 21: Number of wireline subscribers
Chart 22: Comparison of rural and urban subscriptions-wireline
Chart 23: Share of different wireline players by subscriber base
Chart 24: Net additions (q/q) in subscriber base of wireline players in Q3FY14
Chart 25: Number of narrowband & broadband subscribers
Chart 26: Number of wireless internet subscriptions
Chart 27: Market share of ISPs based on subscriptions
Chart 28: Internet access technologies with market share
Chart 29: Breakup of mobile wireless internet subscriptions by players
Chart 30: Minutes of usage for internet telephony
Chart 31: Indian mobile cellular subscriber base of Bharti Airtel
Chart 32: Annual revenues of Bharti Airtel
Chart 33: Profit margins of Bharti Airtel
Chart 34: Mobile cellular subscriber base of Idea
Chart 35: Annual consolidated revenues of Idea
Chart 36: Profit margins of Idea
Chart 37: Mobile cellular subscriber base of Reliance Comm.
Chart 38: Annual consolidated revenues of Reliance Comm.
Chart 39: Profit margins of Reliance Comm.
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